Nancy Pelosi joins GOP on for-profit college aid

Published 4:00 am, Saturday, April 9, 2011

US House Minority Leader Nancy Pelosi speaks during a press conference about the budget and a possible shutdown of the US government at the US Capitol in Washington, DC, April 7, 2011.

US House Minority Leader Nancy Pelosi speaks during a press conference about the budget and a possible shutdown of the US government at the US Capitol in Washington, DC, April 7, 2011.

Photo: Saul Loeb, AFP/Getty Images

Nancy Pelosi joins GOP on for-profit college aid

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It's not often that House Minority Leader Nancy Pelosi camps under the GOP tent, but that's just what happened recently when she broke ranks with Bay Area Democrats and the Obama administration and voted to keep billions of dollars in federal student aid flowing into the coffers of for-profit colleges.

She had her reasons. Some of the biggest recipients of the $32 billion in federal student loans and Pell Grants each year paid to for-profits are in her district - including major Democratic donor John Sperling, founder of the online University of Phoenix, the nation's largest for-profit college.

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The issue arose after Education Secretary Arne Duncan proposed a rule that would stiffen federal aid requirements for for-profits, making them provide stats showing that their students actually are getting the jobs they trained for.

For-profit students make up just 10 percent of the total college population, but account for 43 percent of all loan defaults, the department says.

Schools in Pelosi's backyard that have a big stake in the federal grants rule changes include:

-- The Academy of Art University, one of the biggest landowners in the city. More than half the academy's 17,000 students received federal grants or aid last year totaling $199 million, according to the U.S. Department of Education.

Campaign finance records show that the 90-year-old Sperling, along with his son Peter and their Apollo Group Inc., have poured about $600,000 into Democratic and Republican campaigns since 2008, including the Democratic Congressional Campaign Committee, where Pelosi has been a major fundraiser.

Sperling is also a part-time San Francisco resident, and his family has purchased three mansions here worth $62 million.

According to published reports, Sperling personally lobbied Congress against the administration's proposed restrictions.

An Apollo Group spokesman said in a written statement they were concerned that the impacts of the proposed restrictions weren't fully understood and that they could limit student options and potentially "unfairly disadvantage hundreds of thousands of historically underserved students."

A Republican-authored House amendment to block the secretary from going ahead with the loan plan cleared the House over the "no" votes of a number of Bay Area Democrats, including Reps. George Miller, Barbara Lee, Anna Eshoo and Jackie Speier.

The amendment never reached the Senate, but some Pelosi allies in Washington say her support has given cover for the GOP to continue pressing to include the amendment in the final budget package.

"We are disappointed in her vote, and we made that very clear to her staff," said David Halperin, director of the student advocacy group Campus Progress, and one of the few reform supporters willing to speak on the record for fear of upsetting the powerful Pelosi.

Pelosi spokesman Drew Hammilltold us "the leader heard from advocates on both sides of this issue, including the Art Institute of California, Heald College and Everest College - all in San Francisco."

And while some friends might not like Pelosi's stance, Hammill said, "The amendment simply gives room for the Congress and the administration to sit down and find a responsible path forward that addresses the concerns public and for-profit institutions have."

Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. Phil can be seen on CBS-5 morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815 or e-mail matierandross@sfchronicle.com.

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